Dividend policy literature review

In the case of mutual insurance , for example, in the United States, a distribution of profits to holders of participating life policies is called a dividend . These profits are generated by the investment returns of the insurer's general account, in which premiums are invested and from which claims are paid. [19] The participating dividend may be used to decrease premiums, or to increase the cash value of the policy. [20] Some life policies pay nonparticipating dividends. As a contrasting example, in the United Kingdom, the surrender value of a with-profits policy is increased by a bonus , which also serves the purpose of distributing profits. Life insurance dividends and bonuses, while typical of mutual insurance, are also paid by some joint stock insurers .

The basis of the Australian dividend imputation system is that when Australian resident shareholders receive dividends from Rio Tinto Limited, they may be entitled to a credit for the tax paid by the Company in respect of that income, depending on the tax status of the shareholder. The application of the system results in the tax paid by the Company being allocated to shareholders by way of imputation credits attaching to the dividends they receive. Such dividends are known are franked dividends. A dividend may be partly or fully franked. Any imputation credits attached to the dividend are shown in the Dividend Statement provided to shareholders.

Dividend policy literature review

dividend policy literature review

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